The terror attacks on Mumbai was a test of India's patience and the Army is ready to face any challenge posed by terrorism, Army chief General Deepak Kapoor said today.

"The attack on Mumbai [Images] was a test of our patience...the only and biggest challenge before us is terrorism and we are ready to face this challenge," Kapoor said at the 61st Army Day parade in New Delhi [Images].

Stating that all options to tackle the terror menace were open, he said India wanted to resolve its issues through peaceful means.

"However, to ensure the security of its people and territory, we can use all possible available options," Kapoor said.

He said the army was always ready and capable of carrying out whatever task it is assigned by the government.

Mentioning the global economic meltdown as the second biggest challenge faced by the world, he said the government didn't want the financial proposals of armed forces to be impacted by recession and asked his officers to ensure full value for money spent on the armed forces.

"We want our officers to ensure that the money in armed forces is wisely in view of the economic meltdown," Kapoor said.

He said all neighbours of India were facing challenges, which could pose threat to the security of the country. "We have to remain vigilant against these threats if we have to progress and prosper," the army chief said.

Mentioning the various internal security threats faced by the country, the army chief said, "There are various elements in the country which still want to disintegrate the nation and the biggest threat comes from the insurgencies in Jammu and Kashmir [Images], Northeast and Naxalism."

He said all organisations of the government were working against these threats. Talking about the achievements of the army in containing the insurgencies in the country, Kapoor said, "Elections in J&K could be held peacefully because of the security shield provided by the Army and we have also eliminated the capabilities of militants to carry out sensational strikes in the state."

"In Assam, we have been able to establish peace and marginalised ULFA there. In Manipur, the Assam Rifles and Army have managed to bring down the violence levels and in Nagaland, we have cut down the violence between the two factions of the NSCN," he added.

On Naxalism, he said though the army was not directly involved in operations against the Naxals, it was helping other forces by providing them training and other logistic support. He said during natural calamities such as the massive floods in Bihar, the army had played a big role in providing relief and succour to the affected people and saved many lives there.